Exam 11: Expenditure Multipliers

-In the above table, C is consumption expenditure, I is investment, G is government expenditure, and X - M is net exports. All entries are in dollars. The slope of the aggregate expenditure function is

A change in which of the following changes the slope of the aggregate expenditure curve?

The government estimates that the fiscal policy multiplier is 2.0. If this estimate is accurate, then the slope of the AE curve is ________.

When disposable income equals $800 billion, planned consumption expenditure equals $600 billion, and when disposable income equals $1,000 billion, planned consumption expenditure equals $760 billion. What is the marginal propensity to save?

-In the above figure, point b represents the point where planned expenditures are ________ real GDP.

How does the concept of the multiplier help explain business cycle turning points?

-In the above table, suppose investment decreases by $0.1 trillion. The multiplier equals

The relationship between the multiplier and the MPC is

The saving function shows a ________ relationship between ________.

If consumption expenditures for a household increase from $1000 to $1800 when disposable income rises from $1000 to $2000, the marginal propensity to consume is

If real GDP exceeds aggregate planned expenditure, what happens to firm's unplanned inventories?

Which of the following is TRUE?

When prices are fixed and there are no imports or income taxes, the value of the multiplier is

The slope of the consumption function

As disposable income increases, consumption expenditures

What is the marginal propensity to consume?

"If the income tax rate is high enough, the multiplier can be negative." Is the previous statement correct or incorrect?

What is the relationship between the MPC and the slope of the AE curve?

-When disposal income is $5.0 trillion, consumption expenditure is $4.5 trillion. When disposal income is $6.0 trillion, consumption expenditure is $5.0 trillion. What is the marginal propensity to consume?

Suppose that the slope of the AE curve is 0.75. Then a $100 increase in autonomous spending means equilibrium expenditure will